Panic disorder and major depression are both serious illnesses which are associated with severe and disabling symptoms often including extreme difficulty functioning at work and at home as well as a high risk of suicide attempts and suicide. Patients frequently experience these disorders simultaneously and the consequences are typically worse than those associated with either disorder alone. Although researchers have begun detailing the clinical characteristics and natural history of individuals in whom these illnesses co-occur, there are no controlled- trials available to determine which pharmacological treatments available are best suited to treat this comorbid condition. Without this information clinicians are often handicapped in their ability to determine-the most effective treatment strategies for their patients. The two medications best documented to be effective in both of these conditions are the tricyclic imipramine and the monoamine oxidase inhibitor phenelzine. Although tricyclics such as imipramine have been more commonly used to treat this disorder, limited data suggest that the monoamine oxidase inhibitors are more effective than tricyclics. The selective serotonin uptake inhibitors (SSRIs) have been widely used to treat panic disorder and major depression, but there are few data on antipanic efficacy. To test the hypothesis that phenelzine is more effective than imipramine in treating this comorbid disorder, and to assess the clinical comparative efficacy of a selective serotonin uptake inhibitor, paroxetine, 224 patients identified by use of the Structured Clinical Interview for DSMIII-R (SCID) as having both panic disorder and major depression will be randomly assigned in a double-blind fashion to treatment with phenelzine 45-90 mg, imipramine 150-300 mg, paroxetine 30-60 mg or placebo. Raters who are blind to treatment group, medication dosing and side effects will evaluate patients for symptoms of depression and panic at ten sessions over a 12-week treatment period. The primary outcome variable will be proportion of patients in each group rated as "much" or "very much" improved after treatment. Specific measures of anxiety, panic attack frequency and severity, phobia, depression, work, family and social functioning will also be assessed at each session. Responders will be continued in a double-blind fashion (unfunded) for an additional 9 months in order to gain pilot data on long-term outcome of treatments for coexisting panic disorder and major depression.